The manager of the company is looking to expand their business overseas. The expected cash flows of

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The manager of the company is looking to expand their business overseas. The expected cash flows of the project are given below.

Cash flows Year

$6,000 2

$ 33,600 4

$99,000 4

The interest rate over the entire period of the investment is a nominal rate of 9% p.a. compounded quarterly. If the company can buy the investment at a price of $80,000 today, would you recommend that this is a good investment? Why or why not? Do I have to use an effective rate to calculate PV? Thanks

Posted Date: May 15, 2024 12:46 PM

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The manager of the company is looking to expand their business overseas. The expected cash flows of

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To determine whether the investment is a good one we need to calculate the net present value NPV of ... View the full answer

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